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IFC Investment Climate Advisory Services MENA Rising to the Challenge

Maha Hussein - Sherif Hamdy

Beirut , September 2011

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At the heart of the Arab Spring

How can we support growth with social justice?

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DEMOGRAPHIC CHALLENGE

World’s highest youth population – 60% under 30, around 100 million strong

In Egypt alone, around 800,000 new entrants to the labor market each year

20-40% unemployed, world’s highest, and high levels of informal employment

Lowest female labor market participation: 25% employed five years after graduation

Labor market rigidities, skills mismatch, schools geared toward public sector jobs

Highest Youth Unemployment Labor Skills as Major Constraint (%)

Note: MENA 6 = Egypt, Jordan, Lebanon, Morocco, Syria, Tunisia

Source: IMF REO (Oct. 2010)

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YOUTH – FROM DEMOGRAPHIC CHALLENGE TO OPPORTUNITY

0 10 20 30 40 50 60

Quality of education

Personal debt

Corruption

Loss of traditional values

Opportunities for women

Gap between Rich and Poor

Dangers of drugs

The Economy

Human Rights

Unemployment

Rising cost of living

Most Significant Challenge

Source: Arab Youth Survey March 2011

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FROM DOWNWARD SPIRAL Narrow growth and trust gap, inequitable growth

Poor left behind

Unemployment

Weak institutions

Trust Gap

Culture of administrative control heavy

costs

Limited

Private investment

Informality and corruption

Institutions of economic

governance underfunded

Connected elites have access

Strong vested interests, limited

competition

Lack of participation,

accountability, transparency

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TO VIRTUOUS CIRCLE Participation, better regulation, formalization, better institutions to enable

access, leading to private sector growth

Social impact

Employment

Competition

Transparency

Smart regulation (not

deregulation)

Increased investment or formalization

Broader tax base

Stronger institutions of governance

Excluded segments gain

access

Increased competition, meritocracy

Dialogue, Participation,

accountability, transparency

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Social Impact

Employment

Competition

Transparency Dialogue

Social Entrepreneurship

SME Entry

Priority Sectors

Insolvency

Commercial Justice

Innovation

Business Regulatory Reform

Competitive Industries

Themes Crisis Response Medium-term Strategy

THESE FOUR THEMES DEFINE CRISIS RESPONSE AND MEDIUM-TERM STRATEGY

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IFC ADVISORY BUSINESS LINES

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INVESTMENT CLIMATE CURRENT PORTFOLIO

Yemen Tax

Jordan Inspections II

Afghanistan licensing

Pakistan Sub-national

Pakistan ADR II

Morocco ADR II

Egypt ADR

Yemen IG / Reengagement KM

Egypt Logistics

Egypt e4e

Jordan Business Entry

Lebanon Regulatory Reform / Tourism

Tunisia e4e

Morocco Agribusiness

Tunisia BRR/Tourism/InvProm

Iraq Construction Permits

Afghanistan ADR

Lebanon ADR

Yemen Business Entry

Jordan e4e

Jordan Comp. Industry

Algeria PPD

Egypt PPD

Libya?

Egypt Startup

Jordan Water

BRR

Industry-Specific

Commercial Justice

PPD

DB Reform MENA

WBG Startup

Advocacy Egypt

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Pakistan

Egypt Algeria Libya?

Tunis

Morocco

Afghanistan

Yemen

Lebanon

WBG Iraq

Afgh. Business Edge Training

Egypt Corporate Governance

Afgh. Horticulture Export Cluster

Pak. Business Edge Training

Jordan Corporate Governance

Pak. Corporate Governance

Yemen Business Edge Training

Pak. Waster Paper Recycling

Yemen Corporate Governance Cleaner Production (Morocco, Tunisia, Egypt, Lebanon, Jordan, Pakistan)

MENA ESG Index

WB&G Olive Oil Cluster

Leb. Green Building “ARZ”

SME Development Program Corporate Governance Program Climate Change Program

Regional Projects:

Business Edge & SME Toolkit Program (Egypt, Jordan, Lebanon, Qatar, Tunisia)

Corporate Governance (Tunisia, Egypt, Lebanon, WB&G, GCC, Afghanistan)

Morocco Corporate Governance Forum

Clean Energy (Morocco, Egypt, Lebanon, Jordan, Pakistan)

SUSTAINABLE BUSINESS ADVISORY CURRENT PORTFOLIO

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PPP ADVISORY CURRENT PORTFOLIO

Amman

Dubai

Cairo

Saudi Arabia

• Medina Airport

• Jeddah/Riyadh Airport Cities

• Hajj Terminal

• KAIA Desalination plant

Syria • Al Naseriah IPP

Yemen • Aden IPP

• Al Hodaidah IPP and Al Mukalla IPP

• PPP program implementation - PPP Law, PPP Unit

Morocco • Guerdane Irrigation

• Chtouka desalination

• Ouarzazate solar

Egypt •New Cairo Waste water

Alexandria Hospitals

•Dairut IPP

Pakistan • FESCO electricity distribution

• Lahore Water

• Green Power (Wind energy)

• Wheat Silos (Punjab & Sindh)

• Queen Alia airport

Jordan

Karachi

Rabat

Sanaa

Riyadh

Jeddah

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ACCESS TO FINANCE CURRENT PORTFOLIO

CLIENTS Microfinance Institutions Banks Governments

(Financial Infrastructure)

PRODUCTS

COUNTRIES

- Strategy/ Product Dev. - Risk Management - Housing finance

- SME Banking - Women In Business - Housing Finance - Risk Management

- Credit Bureaus - Leasing - Secured Lending - Mobile Banking

- Morocco - Egypt - Jordan - Syria - Yemen - Tunisia - Iraq

- Lebanon - West Bank - Saudi Arabia - Yemen - Pakistan - Tunisia - Egypt - Jordan

- Jordan - Lebanon - West Bank - Yemen - Afghanistan - Morocco - Tunisia - Iraq

MSME Access to Finance

TEAM FOCUS

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